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Sacramento Kings Sold For $525 Million

The Maloof family has agreed to sell the Sacramento Kings to hedge fund manager Chris Hansen and Microsoft CEO Steve Ballmer for $525 million, plus a relocation fee the buyers will pay the league that will likely be well in excess of $30 million, according to my sources familiar with the transaction. A last ditch effort by Sacramento‘s mayor Kevin Johnson to keep the NBA team in the city failed because he could not assemble a group of investors fast enough.

The $525 million price for the Kings is the second-most ever paid for an NBA team. In 2010 Ted Leonsis bought the 56% of the Washington Wizards and Verizon Center he did not already own for an enterprise value of $551 million. The most ever paid for a basketball team without an arena was $450 million for the Golden State Warriors shortly after the Wizards deal.

The billionaire Ballmer and rich Hansen can simply write a check to the Maloofs, whose casino business and basketball team are highly leveraged. Ballmer and Hansen will move the team to Seattle and play in KeyArena for two seasons before moving into a new, state-of-the-art arena that will cost $490 million. When the relocation fee is factored in, the final price for acquiring the Kings will be around $600 million.

In addition, by moving to Seattle the Kings will get a richer local television deal. Seattle’s metro area population is 3.3 million, more than a million people more than Sacramento.

A year ago we valued the Kings at $300 million. But the new arena, which will be run by Ballmer and Hansen, will add tens of millions of dollars a year from premium seating, sponsorship and non-NBA events that the Kings currently do not get at Sleep Train Arena. In addition, there is the possibility of an NHL team eventually moving into the arena, which would add more money to the pot.

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Any partnership willing to spend that kind of money ($525M – say WHAT?!!) to buy only part of the Kings and; therefore, be forever harnessed in tandem with the Maloofs, deserve whatever they get for that bonehead decision. If the deal goes through, I’ll be waiting to hear about all of the drama that surely will plague Seattle for years to come.

A little upset. Not at the sales price (Although the price for a 65% ownership stake I think is very expensive), but that this transaction eliminates my hometown (Virginia Beach, VA) from getting a pro-sports team. We had been in the mix.

Please make sure to mention my name at the end of you retracting article come April 18th. This isn’t a done deal. First rule of journalism, make sure your facts are correct before even contemplating an article.

Mike Ozanian get your facts right jeez! The Sacramento Bid hasnt failed, the John kehriotis bid(not with kevin johnson) has failed. Sacramento has a STRONG financial backing of Billionares Ron Burkle, Mark Mastrov, Pual Jacobs and Viviek Ranadive. Do a little research please before spewing to the national audience.